Autumn Statement shifts January fuel duty rise to August
Fuel duty will not be raised in January after Chancellor George Osborne scrapped the measure in today’s Autumn Statement.
The decision has been welcomed by the likes of MP Robert Halfon and transport bodies that have collectively demanded cheaper fuel as part of the FairFuelUK campaign, which highlighted the issue and secured a parliamentary debate earlier this month.
However on a less welcome note, the Chancellor added August 2012 would see a fuel duty increase of 3ppl; effectively postponing January’s rise by eight months.
Peter Carroll, who leads the FairFuelUK campaign, said that upping fuel duty in January would have been “economic madness”.
He commented: “Petrol & diesel remain far too expensive. We will be fighting on to try and make the Government understand that the economy needs an actual cut in fuel duty – a cut would create jobs, give people a little more disposable income and stimulate the economy. This will mean that the Government and the Chancellor will gain, not lose, by cutting duty.”
Martin Brown, MD of Fleet Alliance, agreed, adding that fuel prices were too high in the first place: “Although any attempt to keep fuel costs down is welcome, this does not alter the fact that the price of fuel is too high and that, for companies with vehicle fleets, is their largest cost after depreciation.”
Mr Brown said his company would continue advising its clients to try and manage fuel costs as tightly as possible, by selecting cheaper supermarket fuel wherever practical and using fuelcards to manage drivers’ fuel spends more efficiently.
He continued: “There is a certain irony that fuel had become more expensive because of the Government’s increase in VAT to 20% in any case, so there is a certain element of giving with one hand and taking away with the other.
“But the changes announced will be applauded by many businesses which are under considerable cost pressures at this time.”
“Victory for common sense”
Although delighted at the immediate implications, Jakes de Kock of The Fuelcard Company had concern for Britain eight months down the line.
“Aren’t we just delaying the inevitable?” he asked. “January’s rise would have cost the fleet industry around £325m, yet surely this is a burden we’ll still need to carry in nine months time?”
He directed the powers-that-be to Sir James Mirrlees’ proposed controversial recommendations to replace fuel duty with congestion charges.
“This proposal could revive the transport industry, reduce city centre traffic and boost the economy by getting Britain moving again,” he added. This proposed system will be a much fairer form of taxation, compared to the current arrangement that unfairly penalises those who drive for a living.
“I would strongly urge the Government to listen to the needs of the transport sector before it’s too late.”
Unhappy New Year
Osborne’s decision has spared Britain a “horrendous New Year’s hangover” in the eyes of Theo De Pencier, Chief Executive of Freight Transport Association.
He added: “While we are relieved that the Chancellor has steered us out of immediate danger, it is obvious that getting the UK back on the road to recovery requires a long term fuel duty strategy, and one which doesn’t make already tough times that much tougher for businesses in an already uncertain economy.
“Today’s decision will help to keep the wheels of industry turning. But the government must now look at taking more substantive steps to invoke a longer term fuel duty policy that doesn’t punish business, prevent growth and grind those wheels to a halt.”
Road Haulage Association Chief Exec Geoff Dunning also believes that today’s statement will only deliver a temporary reprieve while Adrian Tink of the RAC viewed it as “a victory for common sense”.
Mr Tink added: “With people paying in excess of £1,300 per year just to go about their daily lives, this needs to the first, not the last, step.
“This is welcome short term relief, but what is the Chancellor’s plan if prices keep going up next year?”
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